NKE – Market expectations are for Uniform ROA to expand to record highs, but management may have concerns about supply chain constraints and growth
January 21, 2022
- NIKE, Inc. (NKE) currently trades above corporate and historical averages relative to Uniform earnings, with a 33.0x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to expand to a record-high of 56%, accompanied by 5% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to improve to 37% in 2023, accompanied by 4% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $101, representing approximately 38% equity downside for the firm.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about supply chain constraints and growth.